Overtop Vincom Private Limited , Kolkata V. ITO, Ward - 7(2), Kolkata , Kolkata

ITA 1160/KOL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8769 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-01-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 28-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAM BILASH MEENA
• Keywords: Unexplained cash credit; Gift; Question of law; Onus to prove; Set aside
• Section: 143(3); 92A; 260A; 205; 195; 264; 13; 147; 68; 56; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI P.M.JAGTAP, VICE-PRESIDENT AND SHRI S.S.GODARA, JUDICIAL MEMBER ITA NO.1160/KOL/2018 ASSESSMENT YEAR: 2012-13 OVERTOP NINCOM PVT. LTD. 8A, KALACHAND PATITUNDY LANE, COSSIPORE, KOLKATA-700 002 [ PAN NO.AABCO 7138 D ] / V/S . INCOME TAX OFFICER, WARD-7(2), AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA-69 /APPELLANT .. /RESPONDENT /BY APPELLANT NONE /BY RESPONDENT SHRI RAM BILASH MEENA, CIT-DR /DATE OF HEARING 07-01-2020 /DATE OF PRONOUNCEMENT 17-01-2020 /O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2012-13 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-3, KOLKATA DAT ED 22.03.2018, PASSED IN CASE NO. 995/CIT(A)/-3/WARD-7(2)/15-16/KOL, INVOLVING PR OCEEDINGS U/S 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT CASE CALLED TWICE. NONE APPEARS AT ASSESSEES BEHES T. THE REGISTRY HAS ALREADY SENT AN RPAD NOTICE DATED 26.11.2019 TO THE TAXPAYE R. IT HAD NOT PUT IN APPEARANCE IN EARLIER HEARING(S) AS WELL. IT IS ACC ORDINGLY PROCEEDED EX PARTE. THE CASE IS NOW TAKEN UP FOR ADJUDICATION ON MERITS . ITA NO.1160/KOL/2018 A.Y. 2012-13 OVERTOP VINCOM PVT. LTD. VS. ITO WD-7(2), KO L. PAGE 2 2. COMING TO ASSESSEES SOLE SUBSTANTIVE GRIEVANCE CHALLENGING CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION TREATING ITS SHA RE CAPITAL OF 21 CRORES AS BOGUS UNEXPLAINED CASH CREDITS U/S. 68 OF THE ACT LEARNED CIT-DR SUBMITTED IN SUPPORT OF THE IMPUGNED ADDITION THAT IT HAS FAILED TO PROVE I DENTITY, GENUINENESS AND CREDITWORTHINESS OF ITS INVESTOR PARTIES. HIS FURTH ER CASE IS THAT THE ASSESSEE HAD ALSO NOT PUT IN APPEARANCE BEFORE THE CIT(A) AS WELL DES PITE HAVING BEEN AFFORDED ADEQUATE OPPORTUNITIES OF HEARING WHICH CULMINATED IN THE IMPUGNED ADDITION AFFIRMED VIDE LOWER APPELLATE ORDER PASSED EX PARTE AS UNDER:- III. DECISION : IN THIS APPEAL THE ASSESSEE HAS RAISED A NUMBER OF GROUNDS. HOWEVER, THE MAIN ISSUE IS REGARDING THE ADDITION MADE BY THE AO ON ACCOUNT OF UNEXPLAINED FRESH SHARE CAPITAL ALONG WITH PREMIUM RECEIVED BY THE ASSESSEE DURING THE PR EVIOUS YEAR OF RS. 21,00,00,000/-. THE APPELLANT COMPANY FILED ITS RETURN OF INCOME FOR TH E IMPUGNED ASSESSMENT YEAR ON 21.12.2012 DECLARING TOTAL INCOME OF RS.0/-. THE DIRECTORS OF THE APPELLANT COMPANY AND THE DIRECTORS OF THE COMPANIES WHO HAD SUBSCRIBED TO THE SHARES OF T HE APPELLANT WERE NOT PRODUCED BEFORE THE AO. THE APPELLANT FAILED TO ESTABLISH THE GENUINENE SS OF THE SHARE CAPITAL AND PREMIUM RECEIVED DURING THE PREVIOUS YEAR. THE AO PASSED OR DER U/S. 143(3) WHEREIN HE MADE THE ADDITION OF RS, 21,00,00,0001- U/S, 68 ON ACCOUNT O F UNEXPLAINED FRESH SHARE CAPITAL ALONG WITH PREMIUM. THE BASIC ISSUE IS THE GENUINENESS OF THE TRANSACTIONS OF RECEIPT OF SHARE CAPITAL AND HUGE SHARE PREMIUM. HOWEVER, THE APPELLANT HAS FAILED TO DISCHARGE ITS ONUS IN THIS MATTER. THE RELATIONSHIP OF THE ASSESSEE TO THE APP LICANTS SHOULD BE AT ARM'S LENGTH IN SUCH CASES AND THIS IS WHAT THE APPELLANT WAS REQUIRED T O ESTABLISH. ALSO THE CONCEPT OF SHIFTING ONUS ' DOES NOT MEAN THAT ONCE CERTAIN FACTS ARE PROVIDE D, THE ASSESSEE'S DUTIES ARE OVER. IF ON VERIFICATION, THE INFORMATION BECOMES FALSE, UNSATI SFACTORY OR UNVERIFIABLE, THE ONUS SHIFTS BACK TO THE ASSESSEE. THE DETAILS AVAILABLE REFLECT SOME PAPER WORK OR DOCUMENTATION BUT GENUINENESS, CREDITWORTHINESS AND IDENTITY ARE DEEP ER AND OBTRUSIVE. VERIFICATION OF ALL ASPECTS WAS NEEDED BUT DUE TO COMPLETE NON-COMPLIAN CE, THE APPLICANT'S CASE FALLS FLAT. IN THIS CASE NONE APPEARED AND NO COMPLIANCE WAS MADE. NO D OCUMENTS, TO SUBSTANTIATE THE GENUINENESS OF SHARE CAPITAL AND PREMIUM, HAVE BEEN FILED. EVEN THE AUDITED ACCOUNTS OF THE APPELLANT AND THE SHARE CAPITAL SUBSCRIBING COMPANI ES HAVE NOT BEEN FILED BEFORE ME. DOCUMENTS AND EVIDENCES TO JUSTIFY THE GENUINENESS OF THE SHARE CAPITAL AND PREMIUM HAVE NOT BEEN FILED BEFORE ME. THE HIGH SHARE PREMIUM CH ARGED HAS NOT BEEN JUSTIFIED. THEREFORE, THE ONUS CAST U/S. 68 HAS NOT BEEN DISCHARGED. THE APEX COURT OF THE LAND HAS LAID DOWN THE HUMAN PROBABILITY TEST TO ANALYZE THE GENUINENESS OF THE ENTRY THROUGH LOGICAL ANALYSIS I N THE CASE OF CIT VS. DURGA PRASAD MORE (1971) 82 ITR 540 (SC) WHICH HAS ALSO BEEN FOLLOWED IN CASE OF SUMATI DAYAL VS. CIT (1995) 214 ITR 801 (SC). APPLYING THE TEST OF HUMAN PROBAB ILITY AND PREPONDERANCE OF PROBABILITY AS LAID DOWN BY THE APEX COURT TO THE SURROUNDING F ACTS AND CIRCUMSTANCES OF THIS CASE, AS DISCUSSED ABOVE, THE CLAIM OF THE APPELLANT IS FARF ETCHED AND CANNOT BE SUSTAINED ON THE TEST OF HUMAN PROBABILITIES. MOREOVER, THE ISSUE IS SQUARELY COVERED BY THE JUDG EMENT OF HON HIGH COURT, KOLKATA, IN THE CASE OF RAJMANDIR ESTATE PVT, LTD V PCIT IN CA NO 5 09 OF2016, WHEREIN IT HAS BEEN HELD AS UNDER:- '(21) AFTER HEARING THE LEARNED ADVOCATES, WE ARE O F THE OPINION THAT THE FOLLOWING QUESTIONS ARISE FOR CONSIDERATION:- (A) WHETHER IN THE LIGHT OF THE VIEWS EXPRESSED IN THE CASE OF LOVELY EXPORTS (SUPRA) & STELLER INVEST MENT (SUPRA) THE ORDER UNDER ITA NO.1160/KOL/2018 A.Y. 2012-13 OVERTOP VINCOM PVT. LTD. VS. ITO WD-7(2), KO L. PAGE 3 SECTION 263 DIRECTING FURTHER INVESTIGATION IS LEGA L? (B) IS THE FINDING OF THE COMMISSIONER OF INCOME TAX THAT UNACCOUNTED MONEY W AS OR COULD HAVE BEEN LAUNDERED AS CLEAN SHARE CAPITAL BY CREATING FACADE OF PAPER WORK, ROUTING THE MONEY THROUGH SEVERAL BANK ACCOUNTS AND GETTING IT THE SE AL OF STATUTORY APPROVAL BY GETTING THE CASE REOPENED UNDER SECTION 147 SUO MOTU PERVER SE? (C) WHETHER THE ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3)/147 O F THE INCOME TAX ACT IS ERRONEOUS AND ALSO PREJUDICIAL TO THE INTEREST OF THE REVENUE ? (D) WHETHER THE IMPUGNED JUDGEMENT OF THE LEARNED TRIBUNAL IS PERVERSE? [22] WE SHALL CONSIDER THE SECOND QUESTION FIRST. I N A COMMENTARY ON THE PREVENTION OF MONEY LAUNDERING ACT, 2002 BY DR. M. C. MEHANATH AN PUBLISHED BY LEXIS NEXIS, 2014, THE STEPS OF MONEY LAUNDERING ARE DESCRIBED A S FOLLOWS:- ' STEPS OF MONEY-LAUNDERING ALTHOUGH MONEY-LAUNDERING OFTEN INVOLVES A COMPLEX SERIES OF TRANSACTIONS, IT GENERALLY INCLUDES THE F OLLOWING THREE BASIC STEPS: 1. PLACEMENT IT INVOLVES INTRODUCTION OF THE PROCEEDS OF CRIME INTO THE FINANCIAL SYSTEM. THIS IS ACCOMPLISHED BY BREAKING UP LARGE AMOUNTS O F CASH INTO SMALLER SUMS THAT ARE THEN DEPOSITED DIRECTLY INTO A BANK ACCOUNT, OR BY PURCHASING MONETARY INSTRUMENTS, TRANSFERRING THE CASH OVERSEAS FOR DEPOSIT IN BANKI NG/FINANCIAL INSTITUTIONS, USE FOR PURCHASE OF HIGH VALUE THINGS SUCH AS GOLD, PRECIOU S STONES, ART WORKS ETC. AND RESELLING THE SAME THROUGH CHEQUES OR BANK TRANSFER S ETC. 2. LAYERING THIS INVOLVES FORMATION OF COMPLEX LAYERS OF FINANCIAL TRANSACTIO NS WHICH DISTANCE THE ILLICIT PROCEEDS FROM THEIR SOURCE AND DISGUISE THE AUDIT T RAIL. IN THIS PROCESS A SERIES OF CONVERSIONS OR TRANSACTIONS ARE INVOLVED FOR MOVING THE FUNDS TO PLACES SUCH AS OFFSHORE FINANCIAL CENTERS OPERATING IN A LIBERAL R EGULATORY REGIME. OFTEN ' FRONT ' COMPANIES ARE FORMED TO ACCOMPLISH THIS TASK. THESE COMPANIES OBSCURE THE REAL OWNERS OF THE MONEY THROUGH THE BANK SECRECY LAWS A ND ATTORNEY-CLIENT PRIVILEGE. THE TECHNIQUES WED FOR THE PURPOSE ARE TO LEND THE PROC EEDS BACK TO THE OWNER AS LOANS, GIFTS AND ETC., UNDER INVOICING THE ITEMS EXPORTED TO THE REAL OWNER OR ETC. CASES, THE TRANSFERS MAY BE DISGUISED AS PAYMENTS FOR GOODS OR SERVICES, THUS GIVING THEM A LEGITIMATE APPEARANCE. 3. INTEGRATION THIS INVOLVES INVESTMENT IN THE LEGITI MATE ECONOMY SO THAT THE MONEY GETS THE COLOUR OF LEGITI MACY. THIS IS ACHIEVED BY TECHNIQUES SUCH AS LENDING THE MONEY THROUGH ' FRONT ' COMPANIES ETC. THE MONEY MAY BE INVESTED IN REAL ESTATES, BUSINESS AND ETC. THE STAGES AT WHICH MONEY- LAUNDERING COULD BE EASILY DETECTED ARE THOSE WHERE CASH ENTERS INTO- THE DOMESTIC FINANCIAL SYSTEM, EITHER FORMALLY OR INFORMALLY, WH ERE IT IS SENT ABROAD TO BE INTEGRATED INTO THE FINANCIAL SYSTEMS OF TAX HAVEN COUNTRIES AND WHERE IT IS REPATRIATED IN THE FORM OF TRANSFERS. 'THE ROLE OF THE REVENUE AUTHORITIES IN TACKLING THE MENACE OF LAUNDERING BLACK MONEY WAS COMMENTED BY THE LEARNED AUTHOR AS FOLLOWS:- 'IT HAS TO BE KEPT IN VIEW THAT INDIA HAS A PROBLEM OF BLACK. ECONOMY, WHICH IS UNACCOUNTED AND MANY A TIME THE HOLDERS OF BLACK MONEY' ALSO LAUNDER THE BLACK MONEY IN ORDER TO ACQUIRE LEGITIMATE ASSETS. LEGAL OR ILLEGAL INCOME WHICH EVADES TAX AND ILLEGAL INCOME THAT COMES WITH IN THE EXEMPTED TAXATION SLAB CONSTITUTE THE UNREPORTED GROSS DOMESTIC PRODU CT OR BLACK ECONOMY. LAUNDERING THE BLACK MONEY AND LAUNDERING PROCEEDS OF CRIME ARE TWO DIFFERENT ISSUES, ALTHOUGH THERE IS FREQUENT OVERLA P BETWEEN THE TWO. WHILE LAUNDERING BLACK MONEY IS TO BE HANDLED THROUGH TAX ATION LAWS OR SIMILAR LAWS, THE LAUNDERING OF PROCEEDS OF CRIME IS TO BE HANDLED THROUGH SPECIAL ANTI-MONEY-LAUNDERING LAWS. ' - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - --------------------------------------------- --- (24) FROM THE AFORESAID EVIDENCE THE FOLLOWING, PRI MA FACIE, INFERENCES CAN SAFELY BE DRAWN.- (A) THE PROMOTER/DIRECTORS OF THE ASSESSEE AND THEIR CL OSE RELATIVES AND FRIENDS HAD UNITED WITH THE COMMON OBJECT OF CREATING AT LE AST 20 (19+1) COMPANIES APPARENTLY HAVING A LARGE CAPITAL BASE, BUT, IN FAC T THESE ARE MERE PAPER COMPANIES ITA NO.1160/KOL/2018 A.Y. 2012-13 OVERTOP VINCOM PVT. LTD. VS. ITO WD-7(2), KO L. PAGE 4 HAVING NO REAL WORTH. THE TRANSACTION OF SALE AND P URCHASE OF SHARES WAS NOMINAL RATHER THAN REAL. (B) THE ALLEGATION, IN RESPONSE TO THE NOTICE TO SHOW-C AUSE U/S. 263 THAT ' IT BEARS IMPORTANCE TO STATE HERE THAT THE INVESTOR COMPANIES OF SHARES WERE INTERESTED TO SUBSCRIBE SHARES OF THE ASSESSEE COMP ANY AS, ACCORDING TO THEM, THE ASSESSEE COMPANY HAD PROSPECT IN FUTURE , IS A PLAIN LIE. (C) THE BLANK SHARE APPLICATION FORMS ETC. TABULATED ABOVE GO TO SHOW T HAT THE ALLEGED APPLICATION FOR SHARES AND THE ALLEGED ALLOTMENT WERE NOT IN THE US UAL COURSE OF THE BUSINESS. (D) IN THE LIGHT OF THE AFORESAID PIECES OF EVIDENCE AND T HE PRIMA FACIE FINDING, WE ARE EMBOLDENED TO SAY THAT THE THREE REQUIREMENTS: (A) IDENTITY OF THE SHARE-HOLDERS, (B) GENUINENESS OF THE TRANSACTION AND (C) THE CREDITWO RTHINESS OF THE SHARE-HOLDERS REPEATEDLY IMPRESSED, BY MR. PODDAR, UPON US, HAVE NOT BEEN SATISFIED. IDENTITY OF THE ALLEGED SHARE-HOLDERS IS KNOWN BUT THE TRANSACTION WAS NOT A GENUINE TRANSACTION. THE TRANSACTION WAS NOMINAL RATHER THAN REAL. THE CREDI TWORTHINESS OF THE ALLEGED SHARE HOLDERS IS ALSO NOT ESTABLISHED BECAUSE THEY DID NOT HAVE ANY MONEY OF THEIR OWN. EACH ONE OF THEM RECEIVED FROM SOMEBODY AND THAT SOMEBODY RECEIVED FROM A THIRD PERSON. THEREFORE. PRIMA TACK . THE ,WE-HOLDERS ARE MERE NAME LENDERS. [25] FOR THE REASONS DISCUSSED IN THE PRECEDING PAR AGRAPH, WE ARE SATISFIED THAT THE JUDGEMENT IN THE CASE OF CIT - VS- STELLER INVESTME NT (SUPRA) HAS NO MANNER OF APPLICATION TO THE FACTS AND CIRCUMSTANCES OF THIS CASE. THE QUESTION AS TO WHETHER THERE HAS BEEN A DEVICE ADOPTED FOR MONEY LAUNDERIN G ALSO DID NOT CROP UP FOR CONSIDERATION IN THAT CASE. THE PREVENTION OF MONEY LAUNDERING ACT, 2002 WAS NOT ALSO THERE ON THE STATUTE AT THAT POINT OF TIME. BE FORE THE APPEAL IN STELLER INVESTMENT LTD. WAS DISMISSED BY THE APEX COURT, THE QUESTION HAD CROPPED UP IN THE CASE OF SOPHIA FINANCE LTD. REPORTED IN (1994) 205 ITR 98 W HEREIN A SPECIAL BENCH HELD AS FOLLOWS:- 'AS WE READ SECTION 68 IT APPEARS THAT WHENEVER A S UM IS FOUND CREDITED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE THEN, IRRESPEC TIVE OF THE COLOUR OR THE NATURE OF THE SUM RECEIVED WHICH IS SOUGHT TO BE GI VEN BY THE ASSESSEE, THE INCOME-TAX OFFICER HAS THE JURISDICTION TO ENQUIRE FROM THE ASSESSEE THE NATURE AND SOURCE OF THE SAID AMOUNT. WHEN AN EXPLA NATION IN REGARD THERETO IS GIVEN BY THE ASSESSEE, THEN IT IS FOR THE INCOME -TAX OFFICER TO BE SATISFIED WHETHER THE SAID EXPLANATION IS CORRECT OR NOT. IT IS IN THIS REGARD THAT ENQUIRIES ARE USUALLY MADE IN ORDER TO FIND OUT AS TO WHETHER, FIRSTLY, THE PERSONS FROM WHOM MONEY IS ALLEGED TO HAVE BEEN REC EIVED ACTUALLY EXISTED OR NOT. SECONDLY, DEPENDING UPON THE FACTS OF EACH CASE, THE INCOME-TAX OFFICER MAY EVEN BE JUSTIFIED IN TRYING TO ASCERTAI N THE SOURCE OF THE DEPOSITOR, ASSUMING HE IS IDENTIFIED, IN ORDER TO D ETERMINE WHETHER THAT DEPOSITOR IS A MERE NAME-LENDER OR NOT. BE THAT AS IT MAY, IT IS CLEAR THAT THE INCOME-TAX OFFICER HAS JURISDICTION TO MAKE ENQUIRI ES WITH REGARD TO THE NATURE AND SOURCE OF A SUM CREDITED IN THE BOOKS OF ACCOUNT OF AN ASSESSEE AND IT WOULD BE IMMATERIAL AS TO WHETHER THE AMOUNT SO CREDITED IS GIVEN THE COLOUR OF A LOAN OR A SUM REPRESENTING THE SALE PRO CEEDS OR EVEN RECEIPT OF SHARE APPLICATION MONEY. THE USE OF THE WORDS ' ANY SUM FOUND CREDITED IN THE BOOKS ' IN SECTION 68 INDICATES THAT THE SAID SECTION IS VERY WIDELY WORDED AND AN INCOME-TAX OFFICER IS NOT PRECLUDED FROM MAK ING AN ENQUIRY AS TO THE TRUE NATURE AND SOURCE THEREOF EVEN IF THE SAME IS CREDITED AS RECEIPT OF SHARE APPLICATION MONEY.' IN THE CASE OF SUMATI DAYAL-VS- CIT REPORTED IN (1995) 214 ITR 801 (SC) THEIR LORDSHIPS HELD THAT A CAPITA L RECEIPT CAN BECOME TAXABLE IF THE EXPLANATION OFFERED BY THE ASSESSEE ABOUT THE NATURE AND SOURCE THEREOF IS NOT SATISFACTORILY EXPLAINED. THE JUDGEM ENT IN THE CASE OF CIT -VS- LOVELY EXPORTS PVT. LTD.. REPORTED IN (2008) 299 IT R 268 LENDS NO ASSISTANCE TO THE ASSESSEE BECAUSE IN THAT CASE THE DIVISION BENCH REITERATED THAT OMISSION TO MAKE AN ENQUIRY, WHERE SUCH AN EXERCISE IS ITA NO.1160/KOL/2018 A.Y. 2012-13 OVERTOP VINCOM PVT. LTD. VS. ITO WD-7(2), KO L. PAGE 5 PROVOKED, SHALL RENDER THE ORDER OF THE ASSESSING O FFICER BOTH ERRONEOUS AND PREJUDICIAL TO THE REVENUE . THE DIVISION BENCH WENT ON TO HOLD THAT THE REVENUE SHOULD NOT HARASS THE ASSESSEE WHERE ' THE PREPONDERANCE OF EVIDENCE INDICATES ABSENCE OF CULPABILITY '. IN THE PRESENT CASE THERE EXISTS REASONABLE SUSPICION IF NOT PRIMA FACIE EVIDENCE OF CULPABILITY. [26] THE LEARNED TRIBUNAL IN THE IMPUGNED JUDGEMENT IN PARAGRAPHS 3, 4 AND 5 OBSERVED, INTER ALIA AS FOLLOWS:- 'WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E RELEVANT MATERIAL ON RECORD. IT IS RELEVANT TO MENTION THAT WE HAVE DISP OSED OF MORE THAN 500 CASES INVOLVING SAME ISSUE THROUGH CERTAIN ORDERS WITH TH E MAIN ORDER HAVING BEEN PASSED IN A GROUP OF CASES LED BY SUBHLAKSHMI VANIJ YA PVT. LTD. - VS- CIT ( ITA NO.1104/KOIL2014 ) DATED 30.07.2015 FOR THE A. Y. 2009-10. BOTH THE SIDES HAVE FAIRLY ADMITTED THAT FACTS AND CIRCUMSTA NCES OF THE CASES UNDER CONSIDERATION ARE MUTATIS MUTANDIS SIMILAR TO THOSE DECIDED EARLIER, EXCEPT FOR CERTAIN ISSUES WHICH WE WILL ADVERT TO A LITTLE LAT ER. IN OUR AFORESAID ORDER IN SUBHALAKSHMI VANIJYA PVT. LTD., VS. CIT ( ITA NO. 1104/KOL/2014 A, Y. 2009-10), WE HAVE DRAWN THE FOLLOWING CONCLUSIONS: - *** IT IS NOTICED THAT ALL OR SOME OF THE ABOVE CONCLUSIONS ARE APPLICABLE TO THE APPEALS IN THIS BATCH.' THE APPELLANT HAS DISCLOSED A COPY OF THE J UDGEMENT DELIVERED BY THE LEARNED TRIBUNAL IN SUBHALAXMI VANIJYA PVT. LTD -VS - CIT. THE LEARNED TRIBUNAL IN PARAGRAPH 17 I OPINED AS FOLLOWS.- 'ALL THE CASES UNDER CONSIDERATION HAVE THE SAME CO MMON FEATURE OF PASSING ASSESSMENT ORDERS IN UNDUE HASTE. WHEN WE C ONSIDER THE ABOVE FACTUAL MATRIX, THERE CAN BE NO ESCAPE FROM A N AXIOMATIC CONCLUSION THAT IN ALL THESE CASES THE ENQUIRY COND UCTED BY THE AOS IS EXCEEDINGLY INADEQUATE AND HENCE FALL IN THE CATEGO RY OF ' NO ENQUIRY ' CONDUCTED BY THE AO, 'WHAT TO TALK OF CHARACTERING IT AS AN INADEQUATE ENQUIRY', IN OUR CONSIDERED OPINION, THE HIGHLY INADEQUATE ENQUIRY CONDUCTED BY THE AO RESULTING IN DRAWING IN CORRECT ASSUMPTION OF FACTS, MAKES THE ORDERS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. ' - - - - - - - ----- ------------------------------ - [28] WE HAVE INDICATED ABOVE THE PIECES OF EVIDENCE WHICH GO TO SHOW THAT THE COMMISSIONER HAD REASONS TO ENTERTAIN THE BELIEF TH AT THIS WAS OR COULD BE A CASE OF MONEY LAUNDERING WHICH WENT UNNOTICED BECAUSE THE A SSESSING OFFICER DID NOT HOLD REQUISITE INVESTIGATION EXCEPT FOR CALLING FOR THE RECORDS. THE EVIDENCE WHICH WE HAVE TABULATED ABOVE AND THE PRIMA FACIE INFERENCE DRAWN BY US IS DEDUCIBLE FROM THE DOCUMENTS ALSO SUBMITTED BEFORE THE ASSESSING OFFIC ER. THE FACT THAT THE ASSESSING OFFICER DID NOT APPLY HIS MIND TO THOSE PIECES OF E VIDENCE WOULD BE EVIDENT FROM THE ASSESSMENT ORDER ITSELF - - - - - - - - - - - - - - - - - - - - - - - -------------------------------- --- [28] WE FIND NO SUBSTANCE IN THE SUBMISSION THAT THE ORD ER OF THE LEARNED TRIBUNAL IS PERVERSE, AFTER EXAMINING ALL THE SUBMI SSIONS ADVANCED BY MR. PODDAR . [29] WHETHER RECEIPT OF SHARE CAPITAL WAS A TAXABLE EVENT PRIOR TO 1ST APRIL, 2013 BEFORE INTRODUCTION OF CLAUSE (VII B) TO THE SUB-SE CTION 2 OF SECTION 56 OF THE INCOME TAX ACT; WHETHER THE CONCEPT OF ARMS LENGTH PRICING IN A DOMESTIC TRANSACTION BEFORE INTRODUCTION OF SECTION 92A AND 92BA OF THE INCOME TAX ACT WAS THERE AT THE RELEVANT POINT OF TIME ARE NOT QUESTIONS WHICH ARIS E FOR DETERMINATION IN THIS CASE. THE ASSESSEE WITH AN AUTHORISED SHARE CAPITAL OF &.1.36 CRORES RAISED NEARLY A SUM OFRS.32 ITA NO.1160/KOL/2018 A.Y. 2012-13 OVERTOP VINCOM PVT. LTD. VS. ITO WD-7(2), KO L. PAGE 6 CRORES ON ACCOUNT OF PREMIUM AND CHOSE NOT TO GO I N FOR INCREASE OF AUTHORISED SHARE CAPITAL MERELY TO AVOID PAYMENT OF STATUTORY FEES I S AN IMPORTANT POINTER NECESSITATING INVESTIGATION. MONEY ALLEGEDLY RECEIVED ON ACCOUNT OF SHARE APPLICATION CAN BE ROPED IN UNDER SECTION 68 OF THE INCOME TAX ACT IF THE SO URCE OF THE RECEIPT IS NOT SATISFACTORILY ESTABLISHED BY THE ASSESSEE. REFEREN CE IN THIS REGARD MAY BE MADE TO THE JUDGEMENT IN THE CASE OF SUMATI DAYAL -VS- CIT (SUP RA) WHEREIN THEIR LORDSHIPS HELD THAT ANY SUM ' FOUND CREDITED IN THE BOOKS OF THE ASSESSEE FOR ANY PREVIOUS YEAR, THE SAME MAY BE CHARGED TO INCOME TAX .... '. WE ARE UNABLE TO ACCEPT THE SUBMISSION THAT ANY FURTHER INVESTIGATION IS FUTILE BECAUSE THE MONEY WAS RECEIVED ON CAPITAL ACCOUNT. THE SPECIAL BENCH IN THE CASE OF S OPHIA FINANCE LTD. (SUPRA) OPINED THAT LITHE USE OF THE WORDS ' ANY SUM FOUND CREDITED IN THE BOOKS ' IN SECTION 68 INDICATES THAT THE SAID SECTION IS VERY WIDELY WORD ED AND AN INCOME-TAX OFFICER IS NOT PRECLUDED FROM MAKING AN ENQUIRY AS TO THE TRUE NAT URE AND SOURCE THEREOF EVEN IF THE SAME IS CREDITED AS RECEIPT OF SHARE APPLICATION MO NEY. MERE FACT THAT THE PAYMENT WAS RECEIVED BY CHEQUE OR THAT THE APPLICANTS WERE COMPANIES, BORNE ON THE FILE OF REGISTRAR OF COMPANIES WERE HELD TO BE NEUTRAL FACT S AND DID NOT PROVE THAT THE TRANSACTION WAS GENUINE AS WAS HELD IN THE CASE OF CIT - VS- NOVA PROMOTERS AND FINLEASE (P) LTD. (SUPRA). SIMILAR VIEWS WERE EXPRE SSED BY THIS COURT IN THE CASE OF CIT -VS- PRECISION FINANCE PVT. LTD. (SUPRA). WE NE ED NOT DECIDE IN THIS CASE AS TO WHETHER THE PROVISO TO SECTION 68 OF THE INCOME TAX ACT IS RETROSPECTIVE IN NATURE TO THAT EXTENT THE QUESTION IS KEPT OPEN. WE MAY HOWEV ER POINT OUT THAT THE SPECIAL BENCH OF DELHI HIGH COURT IN THE CASE OF SOPHIA FIN ANCE LTD.' (SUPRA) HELD THAT THE ITO MAY EVEN BE JUSTIFIED IN TRYING TO ASCERTAIN TH E SOURCE OF DEPOSITOR '. THEREFORE, THE SUBMISSION THAT THE SOURCE OF SOURCE IS NOT A RELEVANT ENQUIRY DOES NOT APPEAR TO BE CORRECT. WE FIND NO SUBSTANCE IN THE S UBMISSION THAT THE EXERCISE OF POWER UNDER SECTION 263 BY THE COMMISSIONER WAS AN ACT OF REACTIVATING STALE ISSUES. IN THE CASE OF GABRIEL INDIA LTD. (SUPRA) THE CIT W AS UNABLE TO POINT OUT ANY ERROR IN THE EXPLANATION FURNISHED BY THE ASSESSEE. WHEREAS IN THE PRESENT CASE WE HAVE TABULATED THE EVIDENCE WHICH WAS BEFORE THE ASSESSI NG OFFICER WHICH SHOULD HAVE PROVOKED HIM TO MAKE FURTHER INVESTIGATION. THE ASS ESSING OFFICER DID NOT ATTACH ANY IMPORTANCE TO THAT ASPECT OF THE MATTER AS DISCUSSE D ABOVE BY US. THE JUDGEMENT IN THE CASE OF LEISURE WEAR EXPORTS PVT. LTD. (SUPRA) RELIED UPON BY MR. PODDAR HAS NO APPLICABILITY BECAUSE THE EVIDENCE FURNISHED BY THE ASSESSEE IN THIS CASE DOES SUGGEST A COVER UP. WE ALSO HAVE HELD PRIMA FACIE THAT NEIT HER THE TRANSACTION APPEARS TO BE GENUINE NOR ARE THE APPLICANTS OF SHARE ARE CREDITW ORTHY. THE JUDGEMENT IN THE CASE OF OMAR SALAY MOHAMED SAIT (SUPRA) CITED BY MR. PODDAR HAS NO APPLICATION FOR REASONS ALREADY DISCUSSED. IT IS NOT TRUE THAT THE COMMISSI ONER IN THIS CASE HAS MERELY ON THE BASIS OF SUSPICION HELD THAT THIS WAS OR COULD BE A CASE OF MONEY LAUNDERING. WE AS A MATTER OF FACT HAVE DISCUSSED THIS ISSUE IN GREAT D ETAIL AND NEED NOT REITERATE THE SAME. THE ORDER PASSED BY THE COMMISSIONER IS BY NO MEANS AN ACT OF SUBSTITUTING HIS OWN VIEWS TO THAT OF THE ASSESSING OFFICER. IT IS TRUE THAT THE ASSESSING OFFICER HAD REQUISITIONED THE NECESSARY DETAILS BY HIS NOTICE U /S.142 (1) BUT HE THEREAFTER DID NOT APPLY HIS MIND THERETO. THE JUDGEMENT IN THE CASE O F J. L. MORRISON (INDIA) LTD. HAS NO MANNER OF APPLICATION BECAUSE IN THAT CASE THE Q UESTION ESSENTIALLY WAS WHETHER THE RECEIPT WAS OF A CAPITAL OR REVENUE NATURE. THE FACTS AND CIRCUMSTANCES WERE NOT IN DISPUTE. MOREOVER THE VIEW TAKEN BY THE ASSESSING O FFICER WAS NOT SHOWN NOR WAS HELD BY THE COURT TO BE AN ERRONEOUS VIEW. WHEREAS IN THIS CASE WE HAVE DEMONSTRATED IN SOME DETAIL AS TO WHY IS THE ORDER OF THE ASSESSING OFFICER ERRONEOUS AND PREJUDICIAL TO THE REVENUE. THE JUDGEMENT IN TH E CASE OF MALABAR INDUSTRIAL CO. LTD. (SUPRA) AND MAX INDIA LTD. DO NOT APPLY TO THE FACTS OF THIS CASE FOR REASONS ALREADY DISCUSSED BY US. FROM THE JUDGEMENT OF THE LEARNED TRIBUNAL IN THE CASE OF SUBHOLAXMI, PLACED BEFORE US IN GREAT DETAIL BY MR. PODDAR, WE FIND THAT ALL IMPORTANT ISSUES PLACED FOR CONSIDERATION BY NO OTHER THAN MR . PODDAR HIMSELF WERE DULY CONSIDERED BY THE LEARNED TRIBUNAL. ITA NO.1160/KOL/2018 A.Y. 2012-13 OVERTOP VINCOM PVT. LTD. VS. ITO WD-7(2), KO L. PAGE 7 THE HON'BLE HIGH COURT HAS DISCUSSED THE ISSUE IN D ETAIL WITH REFERENCE TO MONEY LAUNDERING ACT, PROVISIONS OF SECTION 68 AND THE CASE OF CREDI TORS BEING ONLY NAME LENDERS. THE HON'BLE HIGH COURT WHILE PASSING THE ABOVE DECISION HAS ALS O TAKEN INTO CONSIDERATION THE FINDINGS GIVEN BY THE APEX COURT IN THE CASE OF LOVELY EXPOR T (P) LTD ( 216 CTR 195 ) TO COME TO THE CONCLUSIONS THAT IT DOES NOT HELP IN THE CASE OF TH E ASSESSEE. THE SLP FILED BY THE ASSESSEE AGAINST THE ORDER OF THE HON'BLE HIGH COURT IN RAJM ANDIR ESTATE PVT. LTD (SURPA) HAS NOW BEEN DISMISSED BY THE HON'BLE SUPREME COURT THEREFO RE THE OBSERVATIONS IN THE ABOVE ORDER HAS NOW ATTENDED FINALITY. FURTHER IN THIS CASE IT IS OBSERVED THAT THERE IS H UGE PREMIUM ON SHARES. THE NR OF THE APPELLANT HAS NOT APPEARED BEFORE ME 3FTD NO CLARIF ICATION HAS BEEN GIVEN IN THIS REGARD. IN THIS CASE THE COMPANY ISSUED 30,000 EQUITY SHARE S FOR RS. 10/- FACE VALUE AT A PREMIUM OF RS. 6990/- PER SHARE. THERE IS NO JUSTIFICATION FOR PREMIUM CHARGED. THE APPELLANT HAS FAILED TO EXPLAIN. THE FINANCIALS DO NOT JUSTIFY THE PREMI UM CHANGED. MOREOVER, THE ISSUE IS SQUARELY COVERED BY THE JUDGEMENT OF HON'BLE ITAT ' C ' BENCH, KOLKATA, IN THE CASE OF I.T.O, WARD- 5(3), KOLKATA VS. M/S BLESSINGS COMMERCIAL PVT LTD IN I.T.A. NO 271/KOL/2014 FOR A.Y 2010-11, WHEREIN IT HAS BEEN HELD AS UNDER: 'THE SECOND ARGUMENT OF THE ID. COUNSEL FOR THE ASS ESSEE, IS THAT THE ASSESSEE HAS PROVED THE IDENTITY AND CREDITWORTHINESS OF THE CRE DITOR COMPANY AS WELL AS THE GENUINENESS OF THE TRANSACTIONS. WE ARE NOT ABLE TO AGREE WITH THE SAME. A 10 RUPEES SHARE HAS BEEN ISSUE AT A PREMIUM OF 990 RUPEES. ON A QUESTION, THE ASSESSEE HAS NOT EVEN ATTEMPTED TO JUSTIFY THE AMOUNT OF SHARE PREMI UM. A PERUSAL OF THE AUDITED STATEMENT OF ACCOUNTS OF THESE COMPANIES DEMONSTRAT E THAT THERE IS HARDLY ANY INCOME WAS DISCLOSED OR ANY EXPENDITURE WORTH MENTIONING W AS CLAIMED THERE IS NO ACTIVITY WHATSOEVER IN THESE COMPANIES. THE RESERVE BANK OF INDIA, THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA, AND CERTAIN OTHER ORGANISATIO NS, HAVE LAID DOWN VARIOUS METHODS BASED ON WHICH THE AMOUNT OF SHARE PREMIUM CAN BE DECIDED. NONE OF THESE METHODS HAVE BEEN FOLLOWED IN THIS CASE. THE EXORBI TANT QUANTUM OF SHARE PREMIUM COLLECTED SHOCKS THE CONSCIENCE OF ANY REASONABLE P ERSON. A MOCKERY HAS BEEN MADE OF THE WHOLE SYSTEM. THESE ARE NOT TRANSACTIONS WHI CH CAN BE JUSTIFIED BY ANY STRETCH OF IMAGINATION. THUS, IN OUR VIEW, THE GENUINENESS OF THESE TRANSACTIONS IS NOT PROVED. 12. THESE BEING COMPANIES, WHICH ARE REGISTERED WIT H ROC, ARE ARTIFICIAL INDIVIDUAL PERSONS AND HENCE, THEIR IDENTITY HAS BEEN PROVED C OMING TO THE CREDITWORTHINESS OF THE CREDITOR, THE EXAMINATION OF THE BALANCE SHEET, PROFIT & LOSS ACCOUNT AS WELL AS BALANCES IN THE BANK ACCOUNT DEMONSTRATE THAT THEY ARE NOT MORE THAN A COUPLE HUNDREDS OF RUPEES OR FEW THOUSANDS OF RUPEES. NO F IGURES ARE IN LAKHS ALSO, EXCEPT THE CHEQUE ISSUED. BANK BALANCE ARE AROUND RS.12,00 0/- THUS IN OUR VIEW THE CREDITWORTHINESS IS NOT PROVED AS THE GENUINENESS O F THE TRANSACTIONS AND THE CREDITWORTHINESS OF THE PARTIES HAVE NOT BEEN PROVE D, THE ADDITION HAS BEEN CORRECTLY MADE U/S 68 OF THE ACT BY THE A.O. 13. THE LAST CONTENTION OF THE ID. COUNSEL FOR THE ASSESSEE IS THAT. IF THESE CREDITS AS WELL AS INVESTMENTS ARE SHAM, THEN NO ADDITION WHAT SOEVER CAN BE MADE AS THESE ARE NOT REAL TRANSACTIONS. HE SUBMITS THAT WHEN THE A. O. GIVES A CATEGORICAL FINDING THAT THESE ARE FICTITIOUS BOOK ENTRIES, THEN LOGICALLY N O ADDITIONS SHOULD BE MADE. IN OUR VIEW, THIS ARGUMENT HAS TO BE DISMISSED FOR THE REA SON THAT CREDIT ENTRY HAS BEEN MADE IN THE BOOKS OF ACCOUNT CONSEQUENT TO RECEIPT OF CH EQUES AGAINST WHICH SHARE CAPITAL HAS BEEN ALLOTTED BY THE ASSESSEE COMPANY WHICH. BY THE ADMISSION OF THE ASSESSEE, ARE LEGALLY VALID TRANSACTION THE REQUIREMENTS OF T HE NEGOTIABLE INSTRUMENTS ACT AND THE COMPANIES ACT ARE FULFILLED IN THIS CASE. SHARE S HAVE BEEN LEGALLY ALLOTTED. AMOUNTS HAVE BEEN VALIDLY RECEIVED BY CHEQUE. THERE IS NO VIOLATION OF LAW. THUS, IT CANNOT BE SAID THAT THESE ARE FICTITIOUS OR SHAM EN TRIES AND NO COGNIZANCE SHOULD BE ITA NO.1160/KOL/2018 A.Y. 2012-13 OVERTOP VINCOM PVT. LTD. VS. ITO WD-7(2), KO L. PAGE 8 TAKEN OF THESES ENTRIES. THESE ARE NOT UNREAL TRANS ACTIONS AS HELD BY THE A.O. THESE TRANSACTIONS ARE VALID IN LAW. 13. 1. HENCE. THE CREDIT RECORDED IN THE BOOKS OF A CCOUNTS OF THE ASSESSEE IS NOT A FICTITIOUS CREDIT AND HAS LEGAL SANCTION. IN VIEW O F THE DISCUSSIONS THESE ARGUMENTS OF THE ID. COUNSEL FOR THE ASSESSEE IS DISMISSED AS DE VOID OF MERIT. 14. WE FIND THAT THE TRANSACTIONS UNDERTAKEN BY THE SE GROUPS OF COMPANIES ARE SCANDALOUS. A NUMBER OF COMPANIES HAVE BEEN FLOATED AND NONE OF THEM HAVE ANY BUSINESS NOR ANY ASSET WORTH MENTIONING. THE FIRST COMPANY ISSUES A CHEQUE TO THE SECOND COMPANY FOR ALLOTMENT OF SHARES AT A HUGE PR EMIUM AND THE SECOND COMPANY ALLOTS SHARES TO THE FIRST COMPANY. THE SECOND COMP ANY INSTEAD OF ENCASHING THE CHEQUE ENDORSES THIS CHEQUE TO THE THIRD COMPANY AS CONSIDERATION OF ALLOTMENT OF SHARES AT A HEAVY PREMIUM IN THAT COMPANY. THE THIR D COMPANY DOES NOT ENCASH THE CHEQUE BUT IN TURN ENDORSES THIS CHEQUE TO THE FOUR TH COMPANY TOWARDS CONSIDERATION OF ALLOTMENT OF SHARES AT A HUGE PREMIUM BY THE FOU RTH COMPANY. THE FOURTH COMPANY IN TURN ENDORSES THIS CHEQUE TO THE FIRST COMPANY A S CONSIDERATION FOR THE ALLOTMENT OF SHARES AT A HUGE PREMIUM BY THE FIRST COMPANY TO TH E FOURTH COMPANY. BY THIS PROCESS THE CIRCUITOUS ROUTE OF ROUND TRIPPING IS COMPLETED . THROUGH THIS PROCESS ALL THE FOUR COMPANIES HAVE HUGE SHARE CAPITAL AND RESERVES AND CORRESPONDING ASSET BY WAY OF INVESTMENTS IN SHARES OF THE OTHER GROUP COMPANIES. WE COME TO UNDERSTAND THE MODUS OPERANDI IS TO SELL THESE COMPANIES HAVING HU GE SHARE CAPITAL AND INVESTMENTS, TO PERSONS WHO HAVE UNACCOUNTED MONEY, BY TRANSFER OF THE SHARES AT A NOMINAL AMOUNT. THE SHARES IN THESE COMPANIES ARE SOLD AT A RIDICULOUSLY LOW VALUE AND CONSEQUENTLY THE MANAGEMENT AND CONTROL OF THIS COM PANY IS TRANSFERRED. THE PURCHASERS OF SHARES OF THE COMPANIES THEREAFTER SH OW BOGUS SALE OF THE INVESTMENTS HELD BY SUCH COMPANY TO THIRD PARTIES THROUGH A CHA IN OF TRANSACTIONS. BY WAY OF LAYERING AND BRING IN THEIR UNACCOUNTED MONEY INTO THAT COMPANY. 14.1. SUCH PRACTICES HAVE TO BE DEPRECIATED. IN SUC H CASES THE ASSESSEES CANNOT CLAIM THAT THE ENTIRE TRANSACTIONS ARE BOGUS TRANSACTIONS AND HENCE THE PROVISIONS OF LAW WILL NOT APPLY AND NO ADDITION CAN BE MADE U/S 68. WE DI SMISS THIS ARGUMENT AS DEVOID OF MERIT. 15. THE ' B ' BENCH OF THE ITAT, DELHI IN ITA NO. 378 & 2164/DEL/2008 . ASSESSMENT YEAR 2000-2001, ITO VS. M/S. SBS PROPERTIES & FINVE ST PVT. LTD., ORDER DT. 30.05.2016. WHEREIN ONE OF US IS THE AUTHOR OF THE DECISIONS HAS HELD AS FOLLOWS: 27. WE NOW CONSIDER THE MERITS OF THE ADDITION WITH OUT TAKING INTO CONSIDERATION THE STATEMENT OF SHRI SK. JAIN OR THE MATERIAL FOUND DURING THE SEARCH OF SHRI S.K. JAIN. ON A PERUSAL OF THE DOCUM ENTS SUBMITTED BY THE ASSESSEE, WE ARE OF THE CONSIDERED OPINION THAT THE GENUINENESS OF THE TRANSACTION AND THE CREDITWORTHINESS OF THE CREDITO RS HAS NOT BEEN DEMONSTRATED BY THE ASSESSEE. THE AO IN HIS ORDER A T PAGE 7 HAS CLEARLY RECORDED THAT THE ASSESSEE COMPANY HAS NO FINANCIAL BASE OR BUSINESS AND THE MONEY RECEIVED BY IT WAS WITHDRAWN THE VERY SAME DA Y OR THE NEXT DAY. MORE IMPORTANT HE HAS RECORDED THAT THE ASSESSEE HAS NOT GIVEN ANY, LET ALONE SATISFACTORY EXPLANATION FOR THE HIGH PREMIUM CHARG ED ON THE SHARES. WHEN SHARES ARE ALLOTTED WITHIN A SPAN OF LESS THAN ONE MONTH THE REASON FOR CHARGING HIGH PREMIUM IN THE CASE OF VPC FINANCIAL SERVICES P LTD. KILIA FINANCIAL SERVICES PVT. LTD., HIGHYIELD SECURITIES PVT. LTD. MEHUL FINVEST PVT. LTD: AND SYNERGY FINLEASE P. LTD. AND REASON F OR NOT CHARGING PREMIUM IN THE CASE OF M/S. TIMELY FINCAP PVT. LTD. AND GRA PH FINANCIAL SERVICES PVT. LTD: IS NOT AT ALL EXPLAINED. THE EXPLANATION GIVEN THAT THE LD. COUNSEL FOR THE ASSESSEE THAT CHARGING OF PREMIUM IS THE SOLE DISCR ETION OF THE COMPANY AND ITA NO.1160/KOL/2018 A.Y. 2012-13 OVERTOP VINCOM PVT. LTD. VS. ITO WD-7(2), KO L. PAGE 9 THAT PRICE IS A CONTRACT ENTERED BETWEEN TWO PARTIE S AND CANNOT BE QUESTIONED BY THE REVENUE IS DEVOID OF MERIT. THE AO CANNOT BE EXPECTED TO WEAR BLINKERS AND ACCEPT BALD EXPLANATIONS OF THE ASSESS EE. THERE SHOULD BE SOME EXPLANATION WHICH IS LOGICAL AND RATIONALE. LD. COU NSEL COULD NOT DEMONSTRATE THAT THE ASSESSEE COMPANY WAS IN FACT CARRYING ON T HE BUSINESS OF FINANCE AND INVESTMENT. IT IS COMMON SENSE THAT SHARES OF LOSS MAKING COMPANIES DO NOT COMMAND A PREMIUM. THE FINANCIAL STATUS OR THE PROJ ECTED CASH FLOW OF THE ASSESSEE COMPANY OR ANY SUCH RECORD HAS BEEN PRODUC ED BY THE ASSESSEE TO JUSTIFY THE CHARGING OF SUCH PREMIUMS FOR ALLOTMENT . DISCOUNTED CASH FLOW MATTER IS ONE OF THE ACCEPTED METHODS TO DETERMINE PREMIUM CHARGEABLE ON SHARE CAPITAL. CERTAIN OTHER METHODS HAVE ALSO BEEN PRESCRIBED. PREMIUM CANNOT BE CHARGED AS PER THE WHIMS AND FANCIES OF T HE COMPANY. IN CASES WHERE EXPLANATION OR JUSTIFICATION OF THE VALUATION OF SHARES IS GIVEN. TO EXPLAIN THE BASIS ON WHICH SHARE PREMIUM HAS BEEN F IXED, THEN NO ADDITION CAN BE MADE AS THE GENUINENESS OF THE TRANSACTION C AN BE HELD AS EXPLAINED. IN THIS CASE NO EXPLANATION WHATSOEVER HAS BEEN GIV EN. UNDER THESE CIRCUMSTANCES WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS NOT DISCHARGED THE BURDEN THAT LAY ON IT IN PROVING THE GENUINENESS OF THE CASH CREDITS. WE ALSO FIND THAT THE AO WAS RIGHT IN HOLD ING THAT THE ASSESSEE HAS NOT PROVED THE CREDITWORTHINESS OF THE SHARE HOLDER COMPANIES. THE BALANCE SHEETS. INCOME TAX ASSESSMENTS ETC. SHOW THAT THE R ESOURCES OF THESE COMPANIES ARE LIMITED. WE NOW DISCUSS THE CASE LAW ON THE SUBJECT. 28. IN THE CASE OF NOVA PROMOTERS AND FINLEASE (P) LTD. THE HON'BLE DELHI HIGH COURT AT PARA 18 AND 19 HELD AS FOLLOWS: '18. IN THE COURSE OF THE ASSESSMENT PROCEEDINGS. T HE ASSESSEE HAD ADDUCED DOCUMENTARY EVIDENCE IN AN ATTEMPT TO PROVE ALL THE THREE INGREDIENTS OF SECTION 68 VIZ. (I) IDENTITY OF THE CREDITOR, (II) CREDITWORTHINESS OF THE CREDITOR AND (III) THE GENUINENESS OF THE TRANSACTION. BUT THE QUESTION BEFORE US CANNOT BE R ESOLVED MERELY ON THE BASIS OF THE DOCUMENTARY EVIDENCE. THE EVIDENCE ADDUCED BY THE ASSESSEE HAS TO BE EXAMINED NOT SUPERFICIALLY BUT I N DEPTH AND HAVING REGARD TO THE TEST OF HUMAN PROBABILITIES AND NORMA L COURSE OF HUMAN CONDUCT. BEFORE WE PROCEED TO NOTE THE FINDINGS OF THE TRIBUNAL AND DECIDE WHETHER THEY HAVE BEEN PROPERLY ARRIVED AT, IT IS RELEVANT TO NOTE A FEW JUDGMENTS OF THE SUPREME COURT. IN CIT V . DURGA PRASAD MORE (L971) 82 ITR 540 HEGDE J. SPEAKING FOR THE SU PREME COURT OBSERVED AS UNDER: - 'NOW WE SHALL PROCEED TO EXAMINE THE VALIDITY OF TH OSE GROUNDS THAT APPEALED TO THE LEARNED JUDGES. IT IS TRUE THAT THE APPARENT MUST BE CONSIDERED REAL UNTIL IT IS SHOWN THAT THERE ARE RE ASONS TO BELIEVE THAT THE APPARENT IS NOT THE REAL. IN A CASE OF THE PRES ENT KIND A PARTY WHO RELIES ON A RECITAL IN A DEED HAS TO ESTABLISH THE TRUTH OF THOSE RECITALS. OTHERWISE IT WILL BE VERY EASY TO MAKE SELF- SERVIN G STATEMENTS IN DOCUMENTS EITHER EXECUTED OR TAKEN BY A PARTY AND R ELY ON THOSE RECITALS. IF ALL THAT AN ASSESSEE WHO WANTS TO EVAD E TAX IS TO HAVE SOME RECITALS MADE IN A DOCUMENT EITHER EXECUTED BY HIM OR EXECUTED IN HIS FAVOUR THEN THE DOOR WILL BE LEFT WIDE OPEN TO EVAD E TAX. A LITTLE PROBING WAS SUFFICIENT IN THE PRESENT CASE TO SHOW THAT THE APPARENT WAS NOT THE REAL. THE TAXING AUTHORITIES WERE NOT R EQUIRED TO PUT ON BLINKERS WHILE LOOKING AT THE DOCUMENTS PRODUCED BE FORE THEM. THEY WERE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMST ANCES TO FIND OUT THE REALITY OF THE RECITALS MADE IN THOSE DOCUMENTS . ITA NO.1160/KOL/2018 A.Y. 2012-13 OVERTOP VINCOM PVT. LTD. VS. ITO WD-7(2), KO L. PAGE 10 IN CIT VS. DAULAT RAM RAWATMULL [1973] 87 ITR 349, THE SUPREME COURT DEALT WITH THE QUESTION AS TO WHEN THE FINDINGS OF FACTS RECOR DED BY THE TRIBUNAL CAN BE INTERFERED WITH IN A REFERENCE MADE UNDER SECTION 6 6 OF THE INDIAN INCOME TAX ACT, 1922. THE SUPREME COURT REFERRED TO THE LEADING CAS E OF EDWARDS (INSPECTOR OF TAXES) V. BAIRSTOW [1955] 28 ITR 579 (HL.) DECIDED BY THE HOUSE OF LORDS IN WHICH VISCOUNT SIMONDS OBSERVED AS UNDER:- 'FOR IT IS UNIVERSALLY CONCEDED THAT, THOUGH IT IS A PURE FINDING OF FACT, IT MAY BE SET ASIDE ON GROUNDS WHICH HAVE BEEN STATED IN V ARIOUS WAYS BUT ARE, 1 THINK, FAIRLY SUMMARIZED BY SAYING THAT THE COURT S HOULD TAKE THAT COURSE IF IT APPEARS THAT THE COMMISSIONERS HAVE ACTED WITHOUT A NY EVIDENCE OR UPON A VIEW OF THE FACTS WHICH COULD NOT REASONABLY BE 'IN THE SAME CASE LORD RADCLIFFE EXPRESSED HIMSELF IN THE FOLLOWING WORDS: IF THE CASE CONTAINS ANYTHING EX FACIE WHICH IS BA D LAW AND WHICH BEARS UPON THE DETERMINATION, IT IS, OBVIOUSLY, ERR ONEOUS IN POINT OF LAW. BUT, WITHOUT ANY SUCH MISCONCEPTION APPEARING EX FACIE, IT MAY BE THAT THE FACTS FOUND ARE SUCH THAT NO PERSON ACT ING JUDICIALLY AND PROPERLY INSTRUCTED AS TO THE RELEVANT LAW COULD HA VE COME 10 THE DETERMINATION UNDER APPEAL. IN THOSE CIRCUMSTANCES, TOO, THE COURT MUST INTERVENE. 'REFERENCE WAS ALSO MADE 10 THE OBSERVATIONS OF BHA GWATI, J. (SPEAKING FOR THE MAJORITY) IN THE CASE OF MEHIA PARTKH & CO. V. CIT (1956)30 ITR 181 (SC), WHICH ARE AS UNDER:- 'IT FOLLOWS, THEREFORE, THAT FACTS PROVED OR ADMITT ED MAY PROVIDE EVIDENCE TO SUPPORT FURTHER CONCLUSIONS TO BE DEDUCED FROM THEM , WHICH CONCLUSIONS MAY THEMSELVES BE CONCLUSIONS OF FACT AND SUCH INFERENC ES FROM FACTS PROVED OR ADMITTED COULD BE MATTERS OF LAW. THE COURT WOULD B E ENTITLED TO INTERVENE IF IT APPEARS THAT THE FACT-FINDING AUTHORITY HAS ACTE D WITHOUT ANY EVIDENCE OR UPON A VIEW OF THE FACTS, WHICH COULD NOT REASONABL Y BE ENTERTAINED OR THE FACTS FOUND ARE SUCH THAT NO PERSON ACTING JUDICIAL LY AND PROPERLY INSTRUCTED AS TO THE RELEVANT LAW WOULD HAVE COME TO THE DETER MINATION IN QUESTION. 'IN DIT V. BHARAT DIAMOND BOURSE [2003] 259LTR 280/ 126 TAXMAN 365, THE SUPREME COURT AGAIN REITERATED THE AFORESAID POSITI ON AND HELD AS UNDER: - 'AS A PRINCIPLE, THIS COURT DOES NOT DISTURB FINDIN GS OF FACT UNLESS THE FINDINGS OF FACT ARE PERVERSE. IT APPEARS TO US THIS IS ONE OF THOSE EXCEPTIONAL CASES WHERE THE CORRECT CONCLUSION RECORDED BY THE ASSESS ING OFFICER, AND AFFIRMED BY THE APPELLATE AUTHORITY, HAS BEEN REVERSED BY TH E TRIBUNAL ON ACCOUNT OF PERVERSE REASONING. AS WE SHALL PRESENTLY SEE. ' 19. THE POSITION THUS IS THAT EVEN WHERE A REFERENC E OF A QUESTION OF LAW IS MADE TO THE HIGH COURT UNDER SECTION 66 OF THE INDIAN INCOM E TAX ACT, 1922 OR SECTION 256 OF THE INCOME TAX ACT, 1961 OVER WHICH THE HIGH COU RT EXERCISES ADVISORY JURISDICTION, AND NOT APPELLATE JURISDICTION, WHERE NORMALLY THE FINDINGS OF FACT RECORDED BY THE TRIBUNAL ARE BINDING ON THE HIGH CO URT, IT HAS BEEN HELD BY THE SUPREME COURT THAT THE FINDINGS ARE NOT BINDING ON THE HIGH COURT IF THEY ARE PERVERSE OR IF THE FINDINGS ARE SUCH THAT NO PERSON ACTING JUDICIALLY AND PROPERLY INSTRUCTED AS TO THE RELEVANT LAW COULD HAVE COME T O THE DETERMINATION UNDER APPEAL. THE POSITION IN AN APPEAL UNDER SECTION 260A OF THE ACT IS ' A FORTIORI AS THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF BHARAT DIMOND BOURSE, (SUPRA) WOULD ITA NO.1160/KOL/2018 A.Y. 2012-13 OVERTOP VINCOM PVT. LTD. VS. ITO WD-7(2), KO L. PAGE 11 SHOW. WE SHALL DEMONSTRATE IN THE FOLLOWING PARAGRA PHS AS TO HOW BOTH THE CIT (APPEALS) AND THE TRIBUNAL HAVE FAILED TO APPRECIAT E THE EVIDENCE IN THE PROPER PERSPECTIVE AND ON THE LINES INDICATED BY THE HEGDE J. IN THE CASE OF DURGA PRASAD MORE (SUPRA). THE PRESENT CASE IS ALSO NOT ONE, AS WE SHALL SHOW PRESENTLY, WHERE THE CONCLUSION OF THE TRIBUNAL IS A REASONABLE CONCLUSI ON WHICH SHOULD NOT NORMALLY BE DISTURBED EVEN IF THE APPELLATE COURT WOULD HAVE TA KEN A DIFFERENT VIEW ON THE SAME EVIDENCE AND MATERIAL. IN THE PRESENT APPEAL THE EV IDENCE AND MATERIAL ON RECORD, PROPERLY CONSIDERED IN THE LIGHT OF THE SURROUNDING CIRCUMSTANCES AND WITHOUT ATTACHING WEIGHT TO NEUTRAL CIRCUMSTANCES OR CIRCUM STANCES OF NO RELEVANCE, POINT TO ONLY ONE CONCLUSION. NAMELY, THAT THE MONIES INTROD UCED BY THE ASSESSEE AS SHARE SUBSCRIPTIONS FROM 15 COMPANIES WERE ITS OWN UNACCO UNTED MONIES. 29. AT PARA 41 HE FURTHER HELD AS FOLLOWS ;- '41. IN THE CASE BEFORE US, NOT ONLY DID THE MATERI AL BEFORE THE ASSESSING OFFICER SHOW THE LINK BETWEEN THE ENTRY PROVIDERS AND THE ASSESS EE-COMPANY, BUT THE ASSESSING OFFICER HAD ALSO PROVIDED THE STATEMENTS OF MUKESH GUPTA AND RAJAN JASSAL TO THE ASSESSEE IN COMPLIANCE WITH THE RULES OF NATURAL JU STICE. OUT OF THE 22 COMPANIES WHOSE NAMES FIGURED IN THE INFORMATION GIVEN BY THE M TO THE INVESTIGATION WING, 15 COMPANIES HAD PROVIDED THE SO- CALLED ' SHARE SUBSCRIPTION MONIES ' TO THE ASSESSEE. THERE WAS THUS SPECIFIC INVOLVEMENT OF THE ASSESSEE -COMPANY IN THE MODUS OPERANDI FOLLOWED BY MUKESH GUPTA AND RAJAN JASSAL. THUS, ON CRUCIAL FACTUAL ASPECTS THE PRESENT CASE STANDS ON A COMPLETELY DIFFERENT FOOTI NG FROM THE CASE OF OASIS HOSPITALITIES (P) LLD (SUPRA).' 30. THE CASE ON HAND THE ASSESSEE COMPANY HAS LINKS WITH THE ENTRY OPERATOR OF SHRI S.K. JAIN. THIS IS EVIDENT FROM THE DETAILS FILED BY THE ASSES SEE COMPANY IN THE FORM OF ASSESSMENT ORDERS OF THE COMPANIES WHICH HAVE MADE SHARE APPLI CATIONS. INDEPENDENT OF THIS LINK WE HOLD THAT THE ASSESSEE HAS NOT PROVED THE GENUINENESS OF THE TRANSACTION IN THIS CASE. THE HON'BLE HIGH COURT HA S LAID DOWN THAT THE EVIDENCE ADDUCED IN THE ASSESSEE HAS TO BE EXAMINED, NOT SUPERFICIALLY, BUT IN DEPTH AND HAVING REGARD TO THE TEST OF HUMAN PROBABILITIES AND NORMAL COURSE OF HUMAN COND UCT. WHEN WE DO SO IN THIS CASE WE HAVE TO UPHOLD THE ACTION OF THE AO. 31. IN THE CASE OF CIT VS. GLOBAL SECURITIES & FINA NCE (P.) LTD. (2014) 264 CTR 481 (DELHI) IT IS HELD AS UNDER:- '11. THE RESPONDENT ASSESSEE IS A PRIVATE LIMITED C OMPANY. IT IS NOT THE CASE OF THE RESPONDENT THAT THEIR DIRECTORS OR PERSONS B EHIND THE COMPANIES, WHO HAD PURPORTEDLY MADE INVESTMENT IN THE SHARES WERE RELATED OR KNOWN TO THEM. IN THE PRESENT CASE SUBSTANTIAL INVESTMENT HA S BEEN MADE IN A PRIVATE LIMITED COMPANY WHICH INCLUDES SHARE PREMIUM @ &.40 /- PER SHARE AMOUNTING TO RS.41,88,000/-. IT IS NOT A CASE OF TH E RESPONDENT ASSESSEE THAT THEY HAD A PROVEN GOOD PAST TRACK RECORD JUSTIFYING A HEFTY PREMIUM, FOUR TIMES THE FACE VALUE. WHAT WAS PLACED ON RECORD WER E CERTAIN PAPERS WHICH SHOWED THAT THE RESPONDENT ASSESSEE HAD TAKEN CARE TO ENSURE LEGAL COMPLIANCES. THE SAID EVIDENCE IS PRIMARILY DOCUMEN TARY EVIDENCE. BUT, WHAT THE TRIBUNAL HAS NOTICED BUT NOT GIVEN DUE CRE DENCE TO ARE THE SURROUNDING CIRCUMSTANCES WHICH INCLUDE A HUGE PREM IUM I.E. FOUR TIMES OF THE FACE VALUE OF THE SHARES, CREDIT ENTRIES IN THE BANK ACCOUNTS BEFORE TRANSFER OF MONEY TO THE ASSESSEE, FAILURE OF THE COMPANIES TO FILE DETAILS OF THE INVENTORIES AND THE FACT THAT THE ASSESSEE COMPANY HAD NOT CHARGED ANY PREMIUM EARLIER. IDENTITY, CREDITWORTHINESS OF THE SHAREHOLDERS AND GENUINENESS OF THE TRANSACTION IN ALL CASES IS NOT ESTABLISHED BY ONLY SHOWING ITA NO.1160/KOL/2018 A.Y. 2012-13 OVERTOP VINCOM PVT. LTD. VS. ITO WD-7(2), KO L. PAGE 12 THAT THE TRANSACTION WAS THROUGH BANKING CHANNELS O R ACCOUNT PAYEE INSTRUMENT. IT WOULD BE INCORRECT TO STATE THAT THE ONUS TO PROVE GENUINENESS OF THE TRANSACTION AND CREDITWORTHINESS OF THE CRED ITOR STANDS DISCHARGED IN ALL CASES IF PAYMENT IS MADE THROUGH BANKING CHANNELS. SURROUNDING AND CORROBORATIVE FACTUAL DETAIL ARE EQUALLY IMPORTANT AND MAY JUSTIFY FURTHER PROOF OR DETAILS BEFORE IT IS HELD THAT ONUS IS DIS CHARGED. AS HELD IN N.R PORTFOLIO (P.) LTD. (SUPRA) THE QUESTION OF DISCHAR GE OF ONUS DEPENDS UPON WHETHER THE TWO PARTIES ARE RELATED OR KNOWN TO EAC H OTHER, THE MANNER IN WHICH THE PARTIES APPROACHED EACH OTHER, WHETHER TH E TRANSACTION WAS ENTERED INTO THROUGH WRITTEN DOCUMENTS TO PROTECT THE INVES TMENT, WHETHER THE INVESTOR PROFESSES AND WAS AN ANGEL INVESTOR, THE Q UANTUM OF MONEY, CREDITWORTHINESS OF THE RECIPIENT THE OBJECT AND PU RPOSE FOR WHICH PAYMENT WAS MADE ETC. THESE FACT ARE PRIMARILY IN KNOWLEDGE OF THE ASSESSEE AND IT IS DIFFICULT FOR REVENUE TO PROVE AND ESTABLISH THE NE GATIVE. THUS, MERE RELIANCE ON NEUTRAL DOCUMENTARY EVIDENCE CANNOT ALWAYS BE RE GARDED A SATISFACTORY DISCHARGE OF ONUS. 12. INVESTMENT DECISIONS, THAT TOO OF INVESTING IN SHARE CAPITAL AT A PREMIUM IN A PRIVATE LIMITED COMPANY, IN THE NORMAL CIRCUMS TANCES, UNLESS THERE ARE OTHER PECULIAR OR PERSONAL REASONS, ENTAILS DUE DIL IGENCE BY BOTH THE SHARE APPLICANT AND THE RECIPIENT COMPANY. THIS IMPLIES I NQUIRY AND VERIFICATION BY THE PERSONS BEHIND THE ARTIFICIAL ENTITY. THERE HAV E BEEN A SPATE OF CASES WHERE PRIVATE LIMITED COMPANIES HAVE PURPORTEDLY RE CEIVED SHARE APPLICATION MONEY FROM UNCONCERNED, UNRELATED PARTIES WITHOUT S ECURING ADEQUATE PROTECTION OF THEIR INVESTMENT AND WITH OTHER SURRO UNDING CIRCUMSTANCES CLEARLY INDICATIVE OF RACKET OR A SEAM. WE REPRODUC E A PORTION THE RULING IN ONKAR NATH V. DELHI ADMINISTRATION AIR. 1977 SC 11 08, WHEREIN IT WAS STATED: '6. THE LIST OF FACTS MENTIONED IN SECTION 57 OF WH ICH THE COURT CAN TAKE JUDICIAL NOTICE IS NOT EXHAUSTIVE AND INDEED THE PU RPOSE OF THE SECTION IS TO PROVIDE THAT THE COURT SHALL TAKE JUDICIAL NOTICE O F CERTAIN FACTS RATHER THAN EXHAUST THE CATEGORY OF FACTS OF WHICH THE COURT MA Y IN APPROPRIATE CASES TAKE JUDICIAL NOTICE. RECOGNITION OF FACTS WITHOUT FORMAL PROOF IS A MATTER OF EXPEDIENCY AND NO ONE HAS EVER QUESTIONED THE NEED AND WISDOM OF ACCEPTING THE EXISTENCE OF MATTERS WHICH ARE UNQUESTIONABLY W ITHIN PUBLIC KNOWLEDGE . . .. NO COURT THEREFORE INSISTS ON FORMAL PROOF, BY EVIDENCE, OF NOTORIOUS FACTS OF HISTORY, PAST OR PRESENT. THE DATE OF POLL ' PASSING AWAY OF A MAN OF EMINENCE AND EVENTS THAT HAVE ROCKED THE NATION NEE D NO PROOF AND ARE JUDICIALLY NOTICED JUDICIAL NOTICE, IN SUCH MATTERS , TAKES THE PLACE OF PROOF AND IS OF EQUAL FORCE. IN FACT, AS A MEANS OF ESTABLISH ING NOTORIOUS AND WIDELY KNOWN FACTS IT IS SUPERIOR TO FORMAL MEANS OF PROOF .... ' 13. IT IS IMPORTANT, TO SEGREGATE CASES OF BONA FID E OR GENUINE INVESTMENTS BY THIRD PERSONS IN A PRIVATE LIMITED COMPANY, FROM CA SES WHERE RECEIPT OF SHARE APPLICATION MONEY IS ONLY A FACADE FOR CONVERSION O F UNACCOUNTED FOR MONEY OR MONEY LAUNDERING. THE SAID QUESTION CANNOT BE DE CIDED WITHOUT TAKING NOTICE OF THE SURROUNDING FACTS AND CIRCUMSTANCES, BY MERELY RELYING UPON PAPER WORK WHICH AT BEST IN SOME CASES WOULD BE A N EUTRAL FACTOR. THE PAPER WORK THOUGH IMPORTANT MAY NOT BE ALWAYS CONCLUSIVE OR DETERMINATIVE OF THE FINAL OUTCOME OR FINDING WHETHER THE TRANSACTION WI Z GENUINE. WHEN AND UNDER WHAT CIRCUMSTANCES ONUS IS DISCHARGED, AS HEL D IN NR. PORTFOLIO (P.) LTD. (SUPRA), CANNOT BE PUT IN A STRAITJACKET UNIVE RSAL FORMULA. IT WILL DEPEND UPON SEVERAL RELEVANT FACTORS. CUMULATIVE EFFECT HA S TO BE ASCERTAINED AND UNDERSTOOD BEFORE FORMING ANY OBJECTIVE OPINION WHE THER OR NOT ONUS HAS ITA NO.1160/KOL/2018 A.Y. 2012-13 OVERTOP VINCOM PVT. LTD. VS. ITO WD-7(2), KO L. PAGE 13 BEEN DISCHARGED BY THE ASSESSEE. OF COURSE SUSPICIO N OR DOUBTS MAY NOT BE SUFFICIENT AND CARE AND CAUTION HAS TO BE TAKEN THA T THE ASSESSEE HAS LIMITATIONS BUT THIS CANNOT BE A GROUND TO IGNORE C ONTRARY INCRIMINATING EVIDENCE OR MATERIAL WHICH WHEN CONFRONTED, MEETS S ILENCE OR NO ANSWER. ' (EMPHASIS OWN) 32. THE PROPOSITION OF LAW LAID DOWN BY THE HON'BLE HIGH COURT IN THE CASE REFERRED ABOVE AND THE SURROUNDING FACTS AND CIRCUMSTANCES C ONSIDERED BY IT ARE APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE ASSESSEE COMPANY . ON A CAREFUL CONSIDERATION OF THE DOCUMENTS FILED BY THE ASSESSEE AND THE EXPLANA TIONS GIVEN BY IT, AND WITHOUT REFERENCE TO EVIDENCES IN THE FORM OF STATEMENT REC ORDED FROM SHRI S. K. JAIN OR THE MATERIAL SEIZED BY THE INVESTIGATION WING TO THE EX TENT USED AGAINST THE ASSESSEE, WE HOLD THAT THE ASSESSEE HAS NOT DISCHARGED THE BURDE N OF PROOF THAT LAY OUT ON IT, TO PROVE THE GENUINENESS OF THESE CASH CREDITS AS WELL AS THE CREDITWORTHINESS OF THE SHARE APPLICANT COMPANIES. IN VIEW OF THE ABOVE DIS CUSSIONS, THE ADDITION MADE BY THE AO U/S 68 OF THE ACT IS UPHELD AND THE ORDER OF THE LD. C1T(A) IS VACATED. 33. IN THE RESULT WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE ORDER OF THE AO THE APPEALS OF THE REVENUE ARE ALLOWED . 15. RESPECTFULLY APPLYING THE PROPOSITIONS OF LAW L AID DOWN BY THE CO-ORDINATE BENCH OF THE TRIBUNAL TO THE FACTS OF THE CASE, WE FIND THAT SEC TION 68 OF THE ACT APPLIES TO THE FACTS OF THIS CASE AS A SUM OF MONEY WAS CREDITED, IN THE BOOKS O F THE ASSESSEE AND THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF THESE CREDITS AS WELL AS T HE CREDITWORTHINESS OF THE CREDITOR. HENCE IN OUR VIEW THE ADDITION HAS RIGHTLY BEEN MADE BY THE AO. 16. THE ID. CIT(A) WAS WRONG IN CONCLUDING THAT SE CTION 68 OF THE ACT DOES NOT APPLY AS THE TRANSACTION IS A FRAUDULENT TRANSACTION AND AS IT I S A SHAM TRANSACTION. HE WAS ALSO IN ERROR IN HOLDING THAT THE ASSESSEE HAS DISCHARGED THE ONUS T HAT LAY ON IT. THE GENUINENESS OF THE TRANSACTIONS HAS NOT BEEN PROVED BY THE ASSESSEE. W E REVERSE THESE FINDINGS OF THE ID. CIT(A). 17. IN VIEW OF THE ABOVE DISCUSSION, WE SET ASIDE T HE ORDER OF THE FIRST APPELLATE AUTHORITY AND RESTORE THE ORDER OF THE ASSESSING OFFICER. 18. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED.' THE HON'BLE IT AT HAS DISCUSSED THE ISSUE IN DETAIL IN THE CASE OF IT.O, WARD-5(3), KOLKATA VS. M/S BLESSINGS COMMERCIAL PVT LTD IN I.T.A. NO 271/KOL/2014 FOR A.Y 2010-11. IN THIS CASE, DURING THE APPELLATE PROCEEDINGS, A NUMBER OF OPPORTUNITIES WERE GIVEN TO THE ASSESSEE. THE APPELLANT HAS NOT JUSTIFIED THAT 30,000 EQUITY SHARES OF RS. 10/- ( FACE VALUE ) WERE ISSUED AT A PREMIUM OF RS. 6990/- PER SHARE. RESPECTFULLY APPLYING THE PROPOSITIONS OF LAW LAID DOWN BY THE CO-ORDINATE BENCH OF THE TRIBUNAL TO THE FAC TS OF THE CASE, WE FIND THAT SECTION 68 OF THE ACT APPLIES TO THE FACTS OF THIS CASE AS A SUM OF M ONEY WAS CREDITED, IN THE BOOKS OF THE ASSESSEE AND THE ASSESSEE COULD NOT PROVE THE GENUI NENESS OF THESE CREDITS AS WELL AS THE CREDITWORTHINESS OF THE CREDITOR. HENCE IN OUR INFO RMED VIEW THE ADDITION HAS RIGHTLY BEEN MADE BY THE A.O. ACCORDINGLY, THE APPEAL OF THE APP ELLANT IS HEREBY DISMISSED AS THE FACTUAL MATRIX IS MORE OR LESS SIMILAR. 3. THE ABOVE DETAILED LOWER APPELLATE DISCUSSION SU FFICIENTLY INDICATES THAT THE CIT(A) HAS TAKEN NOTE OF THE EARLIER FACTUAL MATRIX AS WELL AS THE RELEVANT CASE LAW (SUPRA) WHILST DECLINING ASSESSEES GRIEVANCE ON ME RITS. THERE IS NO REBUTTAL TO THE SAME EMERGING FROM THE INSTANT CASE FILE. WE THEREF ORE QUOTE HON'BLE APEX COURTS LANDMARK DECISION IN COMMISSIONER OF INCOME TAX VS. K.Y. PILLIAH & SONS (1967) 63 ITA NO.1160/KOL/2018 A.Y. 2012-13 OVERTOP VINCOM PVT. LTD. VS. ITO WD-7(2), KO L. PAGE 14 ITR 411 (SC) TO AFFIRM BOTH THE LOWER AUTHORITIES ACTION TREATING THE ASSESSEES SHARE CAPITAL IN QUESTION AS UNEXPLAINED CASH CREDITS LIA BLE TO BE ADDED U/S.68 OF THE ACT IN ENTIRETY. THEIR LORDSHIPS HAVE MADE IT CLEAR THAT W HEN THIS TRIBUNAL FULLY AGREES WITH THE APPELLATE ASSISTANT COMMISSIONER, IT NEED NOT R ECORD SEPARATE REASONS THAN THOSE IN THE LOWER APPELLATE DISCUSSION. THE ASSESSEE FAI LS IN ITS SOLITARY GRIEVANCE THEREFORE. 4. THIS ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 17/01/2020 SD/- SD /- ( !) (#$ ') (P.M.JAGTAP) (S.S.GODARA) VICE PRESIDENT JUDICIAL MEMBER *DKP-SR.PS ( - 17/01/2020 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-OVERTOP VINCOM PVT. LTD.8A, KALACHAND PA TITUNDY LANE, COSSIPORE, KOL KATA-700 002 2. /RESPONDENT-ITO, WD-7(2), AAYAKAR BHAWAN, P-7, CHOW INGHEE SQ. KOL-69 3. + . / CONCERNED CIT 4. . - / CIT (A) 5. / $$+ , + / DR, ITAT, KOLKATA 6. 3 / GUARD FILE. BY ORD ER/ , /TRUE COPY/ +,